Editor’s Sidelines, July 2022: Fundamental Truths

Around the world, recent economic indicators are setting new, and ominous, records. The UN forecasts global inflation will hit 6.7% this year, over twice the average of 2.9% during the decade to 2020, and U.S. inflation is at a four-decade high. According to media reports, almost four dozen countries have raised interest rates in the last six months, which are being hiked at some of the fastest paces seen in decades. The war in Ukraine isn’t helping, feeding inflationary forces and geopolitical tensions.

With these pressures, the world is starting to feel the tug of economic gravity—which could be termed as what goes up usually must also come down. During Covid-19, central bankers kept taps open for worldwide liquidity, preventing global growth from stalling too much. Now, as many countries transition into “living with the virus” mode,…